Blockchain utility tokens: throwing the baby out with the (securities regulation) bathwater?

Insights August 7, 2019

The digital asset roadshow continued this last week with The July 30th Senate Banking, Housing and Urban Affairs Committee hearing on virtual currencies and online market places, convened to hear “…how Congress should regulate digital currencies and blockchain technologies in the online financial market…”.

Just a few days earlier, on July 25th, the Securities and Exchange Commission’s (SEC) Division of Corporate Finance issued a ‘no-recommendation of enforcement’ letter’ (No-Action Letter) in favor of a Pocket Full of Quarters, Inc (PoQ), a blockchain-powered gaming ecosystem built to create ‘…a universal gaming token…[and]… “ wallet for all of your games…”’ and eliminate “siloed video game economies” and their non-exchangeable inter-game currencies which leave an ever-increasing supply of unused gaming currencies on the table for gamers who cant take them to other platforms.

This No-Action Letter followed on from the SEC’s previous one for TurnKey Jet, Inc., dated April 3, 2019. In an earlier piece, “Is There Any Utility Left in Utility Tokens? The SEC Speaks”, we wrote about TurnKey and its token, essentially blockchain-based jet cards allowing jet service ‘Consumers’, Brokers’ or ‘Carriers’ to redeem TKJ Tokens for jet travel services. Read the full article here.

Sam Miller, Rimon Corporate Partner, advises clients in acquisitions and disposals, corporate finance, corporate and partnership structuring and shareholder, operating and buy-sell agreements, general corporate matters, supply, distribution, consignment and inventory management arrangements, and other commercial transactions. He has extensive experience in the metals and transportation industries as well as with technology start-ups, particularly token-driven blockchain businesses, and also advises clients active in the fine art markets. Sam is licensed in California, England and Wales, and South Africa, with specific expertise in all three jurisdictions. He is adept in helping his clients navigate the intricacies of cross-border business and inward investment. Sam has advised clients in a range of countries, including England, Spain, France, Turkey, Lithuania, Latvia, United Arab Emirates, Israel, South Africa, Hong Kong, South Korea, and the United States. Read more.

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